GlaxoSmithKline plc (GSK), Pfizer Inc. (PFE), Merck & Co., Inc. (MRK): Buy These Patent-Cliff Proof Stocks

Merck & Co., Inc. (NYSE:MRK)

Merck & Co., Inc. (NYSE:MRK) announced in March, 2013 that it will continue its Vytorin drug trial known as IMPROVE-IT trial. Earlier it was feared that the Data Safety Monitoring Board (DSMB) might give a decision against the company, which would have led to additional interim trials. This could have been a major setback for the company. As these fears have narrowed, the company can now also focus on its other drugs which are in the development stage.

Suvorexant for imsomnia is the most awaited drug for the company, which is expected to be approved by the end of 2013. The early trial results of this drug were positive as the drug showed less attention and memory loss symptom, which is a common side effect with currently available drugs like Ambien and Lunesta. Even though, this is not expected to become a blockbuster drug but still is expected to contribute around $350 million by 2016.

One other drug which increases my confidence in the company for the long term is MK-3102.  MK-3102 is currently in phase three trial and expected to hit the market in next three years. I think the potential decline in Januvia’s sales once its patent expires will be offset by this new drug’s popularity due to the convenience of less frequent dose.

Conclusion

All these three companies have some potential blockbuster drugs in their portfolio which will help them to maintain their current sales after current drugs patents expire. Additionally, investors can also look at these companies because of their track record of paying dividend. GlaxoSmithKline plc (NYSE:GSK), Pfizer Inc. (NYSE:PFE) and Merck & Co., Inc. (NYSE:MRK) have one year forward annual dividend yield of 5.7%, 3.1% and 3.7% respectively. Considering the growth potential and forward dividend yield, I will recommend buying this stock for long term investment.

The article Buy These Patent-Cliff Proof Stocks originally appeared on Fool.com.

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